Industry Woes Help Bury Respected Garment Maker

Trinity Knitworks didn’t start out a sweatshop.

The Los Angeles garment factory with a decades-long history of fair employment was reopened in 1996 amid hope and great fanfare, thanks to a growing economy and a high-profile government loan to its new owners.

But even a loyal work force and a host of such blue-chip clients as the Walt Disney Co. and Tommy Hilfiger could not save the company.

Trinity folded last month, crushed by mounting debts, foreign competition and lagging sales. One of its owners, who had worked his way up from garment cutter, became ill a little more than a year after taking over the factory and died months later.

In the end, state regulators charged that Trinity took on the role of sweatshop--leaving more than $200,000 in unpaid wages when it closed its doors.

The company’s fall is testament to the forces buffeting Southern California’s garment industry--the nation’s largest, employing 150,000 workers. It is a business characterized by razor-thin profit margins and accelerated production schedules.

Well-intentioned employers are, if anything, at a disadvantage, competing with ever cheaper imports and local shops that pay less than minimum wage.

“One of the problems the sweatshops in the industry create is that they tend to drive everyone down to a least common denominator,” said Steve Nutter, Western states director of the Union of Needletrades, Industrial and Textile Employees. “If you’re an island in a sea of sweatshops, it’s hard to stay afloat.”

Global competition, said state Labor Commissioner Jose Millan, results in a feeding frenzy, in which local producers compete against one another and against foreign factories in a brutal race to the bottom. Trinity, he said, became “a Disney sweatshop.”

A U.S. Department of Labor survey of Southern California sewing shops this year found that fewer than four in 10 complied with minimum wage and overtime laws.

Trinity employees worked through the summer making Lion King jumpsuits and other Disney Store clothing, even after paychecks started bouncing. Private inspectors hired by Disney and other firms to monitor workplace conditions failed to notice that workers were not being paid.

“Right now, I don’t even have money to take the bus,” said seamstress Maria Villagomez, one of 180 former Trinity employees, nearly all immigrants from Mexico and Central America.

It wasn’t the fate anticipated when Edward Drasin and his father arrived from New York in 1954 and founded Drasin Knitting Mills.

Drasin built a 40,000-square-foot factory at the southern end of downtown’s garment district. The firm produced shirts, sweaters and other clothing for such department stores as Macy’s, J.C. Penney and Bullocks. Drasin even had its own label: Edwards of California.

By the 1970s, Drasin said, his company reached up to $20 million in annual sales. But competition from abroad and changing markets sapped profits during the 1990s, nearly forcing him to close.

The Next Generation

Two years ago, Drasin and his partner agreed to sell the company to a new generation of entrepreneurs--a group headed by a protege, Manuel Burgess, a garment cutter who worked his way up to operations chief of Drasin Knitting.

The business was renamed Trinity Knitworks after Trinity Street, where it is located--at the former site of Drasin Knitting Mills--and reopened with 80 mostly longtime employees.

Now, the garment plant he and his father built is deserted.

“It breaks my heart to see this,” Drasin, 70, said as he walked the fabric-littered factory floor that once hummed with sewing machines and the banter of seamstresses. “We were in business for 42 years, and never missed a payroll,” he said.

Thousands of local sewing shops--many launched by immigrant entrepreneurs from Asia, the Middle East and Latin America--struggle to survive the industry’s high failure rates.

Their chief competition comes from Mexico, Central America, the Caribbean and China, where wages are a fraction of the mostly minimum wage salaries paid locally. A dress that retails for $100 may cost $10 in labor costs to produce in Los Angeles, compared with $2 or less offshore.

Los Angeles firms have one key advantage: speed. They can operate under the quick turnaround schedules demanded by the seasonal fashion industry, free of tie-ups at the border, customs brokers and shipping terminals.

Trinity was the first company to get a loan from the Los Angeles Community Development Bank, a federally funded lender created after the 1992 riots to help revive urban neighborhoods.

“This first loan, and those to follow, symbolize our commitment to the future, opening the door to jobs and opportunities throughout our city,” Mayor Richard Riordan said in July 1996, during a ceremony for the bank’s inaugural loan.

At the time of the sale, Drasin said, Trinity had $1.6 million in orders.

The $700,000 community bank loan was largely consumed by purchase and start-up costs, said George Akers, who was Burgess’ partner. The community development bank agreed to loan an additional $450,000 in late 1996.

Even so, Trinity suffered from a lack of operating capital.

The main trouble, said C. Robert Kemp, president and chief executive of the Los Angeles Community Development Bank, was that the company failed to produce enough new sales.

While calling Trinity’s fate discouraging, Kemp said the firm’s failure was not surprising. “Everything we do is in a high-risk environment,” he said.

Kemp said mismanagement played a role in Trinity’s collapse, and even small missteps can be fatal in a business as unforgiving as the garment trade.

Trinity had also suffered an unfortunate twist of fate.

Late last year, “Manny” Burgess was found to have leukemia. After extensive treatment, Burgess, 49, died in September.

Even before Burgess’ illness, long-term employees say they began to see disquieting changes at the factory. The new owners cut vacation benefits and reduced pay for piecework.

Most workers were skilled sewers and cutters who in past years earned more than minimum wage because they were so fast. Some had risen to the supervisory ranks; many of their co-workers were relatives and longtime friends.

“We were like a family,” said Celia Zarate, a seamstress who worked at the plant for 24 years.

Trouble at the factory escalated in May, when paychecks started bouncing, according to state regulators. Most Trinity workers remained, many “for sentimental reasons, especially out of respect for Manny,” said Francisco Hernandez, 39, a 21-year worker, who maintained the sewing machines.

Eventually, some employees filed claims with the state Department of Industrial Relations.

State inspectors arrived July 13, and the company was cited for minimum wage violations involving 142 workers and for failing to pay on the prescribed payday. Records show Trinity later paid more than $69,000 in back wages.

Even as Trinity was tottering, orders from Disney, Tommy Hilfiger and Target stores swelled the payroll, said state regulators. A night shift was instituted to keep pace.

But as representatives of Disney and the other firms kept close watch over production details, such as the placement of inseams, hemlines and zippers, monitors hired by the companies failed to notice Trinity workers were not being paid.

“What Disney, Tommy Hilfiger and these other large companies are really interested in is the quality of the product--not the quality of the work lives of the workers who are actually producing the product,” said California Labor Commissioner Millan, who contends that such self-monitoring failures are common and illustrate the shortcomings of private workplace inspectors.

The companies that hire Trinity and other subcontractors are largely insulated from liability for worker abuses. But Disney and Tommy Hilfiger have offered to reimburse Trinity employees for unpaid labor on their garments. Disney was expected to issue a check for $85,000 this week, state officials said.

“It’s our intent to see to it that those who worked on our goods are paid for their labor,” said Ken Green, a Disney spokesman.

The question remains, how did the monitoring effort fail?

Private compliance firms have sprung up in recent years as clothing manufacturers and retailers seek to avoid embarrassing links to sweatshop labor, both in the United States and overseas.

Labor monitors are supposed to check company time cards, interview employees, make unannounced visits and suggest corrective steps.

But critics say self-monitoring is a poor substitute for increased government enforcement and tougher laws. Some say the process actually makes things worse, by providing a false image of workplace protections.

U.S. Department of Labor officials acknowledge shortcomings in self-policing, but say conditions are generally better in monitored plants.

Wendi Kopsick, a Tommy Hilfiger spokeswoman, said the company relied on a positive profile of Trinity made by a private monitoring firm, Vernon-based CSCC, a large compliance consultant with about 300 clients.

A Clean Bill of Health

CSCC inspectors arrived at Trinity on Sept. 9, one day after federal and state labor inspectors. It was almost two months after state labor inspectors cited Trinity for multiple violations.

Joe A. Razo, California’s deputy labor commissioner, said, “You’d have to be pretty blind not to know what was happening to Trinity by September.”

Nonetheless, the private monitor gave Trinity a clean bill of health, said Bill Bernstrom, a former U.S. Department of Labor official who is now executive director of CSCC. He said monitors were denied full access to records, not an unusual scenario. The finding amounted to a go-ahead for Tommy Hilfiger’s order for 2,760 men’s jackets

Disney’s in-house inspectors in April turned up some “minor safety concerns relating to fire extinguishers, which Trinity immediately corrected,” a company statement said.

Disney’s first order was delivered in July--when paychecks were already bouncing.

Disney said it did not cancel its contract with Trinity until Sept. 28--because of persistent delivery problems, not unpaid labor. Company officials said they were unaware that the state had cited Trinity for not paying workers.

Of almost 19,000 completed garments seized by state investigators at the Trinity site, more than 17,000 bore the Disney Store label. State officials will give the clothes to charity.

Facing eviction, Trinity moved its more than 150 sewing and knitting machines late last month with the intention of reopening. State regulators say Trinity cannot legally resume operations--and may face seizure of its machinery if it tries.

Altogether, state officials said, Trinity owes $213,000 in back wages to 184 former employees.

Trinity officials have declined extensive comment. But during a brief interview outside the plant, Melvyn C. Bell, Trinity’s chief financial officer, expressed optimism.

“Like a lot of small businesses, we have been experiencing a cash flow problem and need working capital,” Bell said as state investigators hauled off boxes and bundles of mostly Disney clothes, allegedly manufactured in violation of minimum wage laws. “This is no sweatshop.”

Meantime, former Trinity employees make the rounds in the garment district, looking for work.

Sitting at a union office near MacArthur Park on a recent evening was ex-Trinity seamstress Lucia Marcos. The 34-year-old mother of five said she is owed more than $2,000 in back pay.

As she fingered two checks from Trinity, returned for insufficient funds, she asked, “Can you tell me, when will I get the money that I worked for?”